Trends in Domestic and Overseas ETF Markets
Last month saw a decline in the investment of Korean retail investors in overseas Exchange Traded Funds (ETFs). According to ETFGI, the number of U.S. ETFs within the top 50 foreign stocks purchased by Korean investors in September dwindled to 21, compared to the previous month. The total purchase amount of overseas ETFs amounted to USD 9.48 billion, down from the peak of USD 12.08 billion in April. This trend indicates that investors are approaching the market with greater caution.
Domestic investors are increasingly turning their attention to the Hong Kong stock market. Recently, KRW 6.4 billion and KRW 4 billion were injected into SK Hynix and Samsung Electronics double leverage ETFs, respectively, reflecting optimistic forecasts for these stocks. This could signify further capital inflows into the Hong Kong market. The high returns from leverage ETFs continue to attract significant investor interest.
The surge in large semiconductor stocks led by Samsung Electronics and SK Hynix has positively impacted ETFs with heavy weightings in these companies. While the KOSPI 200 index soared, equal weight ETFs recorded relatively lackluster returns. The increasing focus on large-cap stocks has led to a rise in leveraged investments, and this skewed distribution needs to be moderated for a more stable market progression.
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